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Primary sector blooming after 2017: MPI

NZ Newswire logoNZ Newswire 15/12/2016

The coming year won't be such a good one for the country's primary exports but helped by recovering milk prices and production, things are looking brighter beyond 2017, the Ministry for Primary Industries believes.

Export earnings from dairy, meat and wool, forestry, horticulture, fishing and others is expected to be down 0.8 per cent to $36.7 billion in the year to June 2017 but a 12.5 per cent boost is expected in 2018, according to its December situational outlook.

Rises of 5.7 per cent, 4.6 per cent and 4.9 per cent are predicted in subsequent years to take the sector's annual export earnings to $47.8b.

A drop in beef and sheep numbers combined with weak global meat prices means the 2017 outlook is neutral, but after that strong increases in prices and production across the board boost the figures.

"This highlights again the strength of our primary industries, and the benefits of our diversified primary sector," said MPI's Jarred Mair.

"However, lower economic growth in trade partners creates headwinds for New Zealand primary industry export growth."

Dairy earnings are forecast to rise 3 per cent in 2017, but is expected to increase 24 per cent to $17b in 2018 as milk production is forecast to return to previous levels.

"It's very pleasing to see the global dairy market rebounding after a difficult few years," Mr Mair said.

MPI FORECASTS:

* Dairy exports to rise 3 per cent in 2017 and 24 per cent in 2018

* Meat and wool exports to fall 10.8 per cent in 2017 but up 3.8 per cent in following year

* Seafood exports up 1 per cent in 2017 and 5 per cent in 2018

* Forestry exports up 3.7 per cent in 2017 and 5.6 per cent in 2018

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